Speculators got less bullish on gold, merchandising long contracts at the most rapid pace this year as prices decline the most in almost three months on prospects for less central-bank stimulus. Goldman Sachs Group Inc. stated that the pullback has further to go. The net-long position occupied by hedge funds and other huge speculators sag down 16 percent to 84,929 futures and options in the week closed Sept. 10, U.S. Commodity Futures Trading Commission data show. Long holdings relinquished 10 percent, the biggest since December, and short bets skyrocketed 9.8 percent. The net-bullish position across 18 U.S.-exchanged commodities slump 4.1 percent, with investors adding to bearish wagers on wheat and corn. Price Depreciates Futures sag down 5.6 percent to $1,308.60 an ounce last week in New York. Gold pulled back 21 percent this year as some investors lost faith in the metal as a store of value, erasing almost $59 billion from the value of exchange-traded products and spurring at least $26 billion in writedowns by mining companies. Fifteen analysts surveyed by Bloomberg expected prices to fall again this week, with seven bullish and three neutral. It was the most bearish survey since June 21. Summers Exit Summers withdrew his nomination to lead the Fed, before a two-day policy meeting starting tomorrow at which the central bank is forecast to reduce monthly bond purchases, known as quantitative easing, that have boosted demand for gold as a hedge against inflation. Summers would tighten Fed policy more than Yellen, who was his main rival to replace Chairman Ben S. Bernanke, according to a Bloomberg Global Poll of investors, analysts and traders last week. Goldman View Gold may decline below $1,000 for the first time since October 2009 as the Fed withdraws stimulus and the economy improves, Jeffrey Currie, Goldman’s head of commodities research, said in a Bloomberg Television interview Sept. 13. Currie issued a sell recommendation for bullion on April 10, before prices plunged 13 percent in a two-session slump ended April 15 that sent the metal into a bear market. Syria Concern Prices jumped 6.3 percent in August on concern that military action against Syria would disrupt oil supplies from the Middle East, raising energy costs and stoking inflation. The U.S. remains “prepared to act” if diplomacy fails to persuade Syrian President Bashar al-Assad to give up his chemical arms stockpile, President Barack Obama said. Crude Bets Money managers added $264 million to gold funds in the week ended Sept. 11, according to Simon Ringrose, the managing director of sales for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Total inflows for commodity funds were $582 million, according to EPFR. Corn Supplies A measure of net-long positions across 11 agricultural products recorded a 7.5 percent increase to 300,032 futures and options. The S&P’s Agriculture Index of eight commodities tumbled 17 percent this year, heading for the worst annual decline since 2008. Money managers expanded their net-short position in corn to 64,686 contracts, from 64,506 a week earlier. Investors have bet on lower price since June as the U.S. government forecasts a record domestic crop. The net-bearish holding in wheat reached 47,008 futures and options, from 38,390. The U.S. corn harvest, the world’s biggest, will expand 28 percent from a year earlier, helping to send global inventories to a 12-year high, the Department of Agriculture said Sept. 12. The USDA raised its estimate for global wheat production 0.5 percent from last month to a record 708.89 million tons. The S&P GSCI gauge spiked 92 percent from the end of 2008 through June 2011 as the Fed’s unprecedented money printing helped revive economic growth and demand for metals, grains and energy. The Bloomberg Dollar Index decline 11 percent. “Supply is going to be really robust, and we don’t see any disruption as the harvest will be especially strong,” said Jim Russell, a senior equity strategist at U.S. Bank Wealth Management, which manages about $112 billion. “The Fed tapering, if it moves forward as anticipated, will strengthen the value of the U.S. dollar, and that should create a little bit of price weakness for all commodities.”
